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Yacht Names on Wire Transfers

Discussion in 'General Yachting Discussion' started by JWY, Apr 22, 2013.

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  1. JWY, Apr 22, 2013
    #1
    JWY

    JWY Senior Member

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    Warning: Do not put yacht names on wire transfers!

    On Monday, one of my brokers had a client wire 10% deposit for boat purchase. Small boat, small deposit ($15,000). On Tuesday, deposit had not appeared in company escrow account. On Wed., found out about OFAC. The client had put the name of the boat on the wire transfer. Although this particular boat was not documented, I found 70 other USCG documented vessels with the same or similar name. It turns out that there had been two Bulgarians who purchased boats in the US for the purposes of money laundering. One of the boats had the same name. Thus OFAC. The Feds held the funds until it could be proven that this SF was not involved in the old money laundering deal. Funds got released to my bank which then held the funds while they did their money-laundering research. Funds got processed and released Sat. evening.

    Buyer's small town bank was on top of it and my bank manager intervened. And it still took 6 days for the wire transfer to be active. Good thing it was a deposit and not a closing as there might be a question of who owned the boat during that lengthy period should an insurance company have to pay a claim. :eek:
  2. RT46, Apr 22, 2013
    #2
    RT46

    RT46 Senior Member

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    WOW, that would have driven me crazy!



    As a buyer, I would prefer to use a certified check.
  3. MBevins, Apr 22, 2013
    #3
    MBevins

    MBevins Senior Member

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    Only problem with that is now the bad guys have learned how to counterfeit certified checks so the banks don't trust those anymore. They call the issuing bank to confirm. Mean while your boats gone and your bank tells you the check's not worth the paper it's written on.
  4. Capt J, Apr 22, 2013
    #4
    Capt J

    Capt J Senior Member

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    I've heard this also from a realtor and closing companies only want wire transfers now, and this is to close a property......that can't be moved!
  5. Beau, Apr 22, 2013
    #5
    Beau

    Beau Senior Member

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    Commercial rule of thumb here in NY is: confirm that the wire transfer actually"hit" your/their account! This may take a couple of hours after the 'transmit' order is given. On bank checks ( no more certified here) confirm that funds have been paid and the issuing bank will honor the draft. Do this before you release anything for any reason
    OP's situation is a little different, and points out why you should do periodic credit check on you and your business interests. An IRS hold would probably have shown up if done correctly - though the scatter gun approach for intercepting funds as described is somewhat unusual
  6. JWY, Apr 23, 2013
    #6
    JWY

    JWY Senior Member

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    Banks sometimes put a 3 - 5 business day hold on certified checks. The standard procedure for an "immediate" transfer of funds on yacht purchase offers and balance due for closing is wire transfers.

    I would never have thought to tell clients to not put a boat name on any correspondence related to initiating or transacting a wire transfer. OFAC (Office of Foreign Asset Control) picked up on the boat name and "seized" the deposit funds. The name of the boat was very ordinary, something like "Regency." This was a US transaction and had nothing to do with foreign funds. It was an executed wire from a bank in Tenn to Bank of America in FLL. Buyer, Seller, brokers - everybody was p.o'd and it cost 6 days of significant delays and time consuming aggravating phone calls - and for nothing.

    Hope this notice prevents somebody else from similar complications.

    Judy